Texas Lawmakers Push for Lower Homeowners Insurance Rates – But They’re Running Out of Ideas

Texas homeowners pay some of the highest homeowners insurance premiums in the country.

Lawmakers are aware of the problem – but they’re running out of ways to solve it.

According to Insurance.com, the average homeowner in Texas pays $4,662 per year for dwelling coverage on a $400,000 property, making it the seventh most expensive state for homeowners insurance.

Only six states (Oklahoma, Nebraska, Kansas, Florida, Arkansas, and Colorado) have higher premiums than Texas.

Over the years, Texas lawmakers have proposed different ways to lower premiums. However, these methods have had mixed success, and Texans continue to pay record-high rates.

According to a new report, Texas lawmakers are realizing they have “few options” for lowering insurance premiums amidst soaring costs – and that could spell trouble for the state’s home insurance marketplace.

Homeowners Insurance Rates Have Doubled in Texas

Texans have paid higher-than-average insurance premiums for years. However, those rates continue to climb – often with double-digit increases per year.

In 2024, for example, the Texas Department of Insurance reported a stunning 19% increase in homeowners insurance, on average, across the state. That’s actually down from the previous year, when the state reported a 21% surge.

In other words, if you were paying $2,000 per year for homeowners insurance in January 2023, you’d be paying $2,880 or more for homeowners insurance today in 2025.

Overall, rates have nearly doubled in the last decade, and Texas continues to be among the top 10 most expensive states for homeowners insurance premiums.

Making things even more expensive for Texas homeowners is the state’s high property tax: with an average property tax rate of 1.68%, Texans are paying around $5,000 per year for property tax on a median-sized home, making Texas the 6th most expensive state in the country for property tax (behind only Connecticut, Vermont, New Hampshire, Illinois, and New Jersey).

The high property tax and high homeowners insurance premiums are combining to make homeownership increasingly expensive across Texas.

How Lawmakers Want to Help

Texas lawmakers have proposed different ways to lower property taxes across the state.

Over the years, Texas lawmakers have launched initiatives like:

• Limiting how much insurance companies can hike rates
• Helping homeowners make their homes more insurable
• Compelling insurers to be more upfront with homeowners regarding policy cancellations and claim denials

Despite these efforts, however, NBC’s affiliate in Dallas-Fort Worth reports “there’s only so much they [lawmakers] can do to tackle costs.”

Lawmakers Blame Inflation & Climate Change

As NBC’s DFW affiliate reports, lawmakers are running out of options because of factors outside their control, including climate change and inflation.

According to the report, climate change and inflation are driving higher homeowners insurance costs across the state:

• Climate change has “intensified extreme weather events,” making hailstorms, hurricanes, and winter freezes more devastating and expensive for insurers. Insurers pass these higher costs onto homeowners.
• Rising population has driven more people into severe weather zones. More people are living in the paths of severe storms – or in flood zones – than ever. These homeowners pay higher-than-average rates for homeowners insurance.
• Inflation has pushed labor and materials costs higher. It costs more to repair a home to pre-loss condition because lumber, labor, and other costs are more expensive.

Here’s how State Rep. Tom Oliverson described the issue to a House committee last month:

“We can’t control the weather, we can’t control inflation…I can’t control the availability of building materials, and I can’t control how the houses that are already built were built, what standard they were built to.”

What’s Next for Texas Homeowners?

Are lawmakers going to give up and simply accept higher insurance premiums for Texas homeowners?

That’s one option – but some lawmakers are choosing to fight back with new legislation.

Proposed Option #1: Checks & Balances Against Insurance Hikes

State Sen. Charles Schwertner (R-Georgetown) proposed a system where the state can reverse an insurer’s rate increase.

Insurers can file a rate increase request with the Texas Department of Insurance and charge new rates immediately. However, if the TDI later determines the price hike was unreasonable, they can overturn it.

Under the proposed system, the TDI would need to manually approve any rate increase over 10% before it would impact Texas homeowners.

The insurance industry, unsurprisingly, is pushing back against this regulation.

Proposed Option #2: A State Grant Program for Retrofitting Homes (House Bill 1576)

Many homes in Texas aren’t built to withstand hurricanes and windstorms, increasing the chance of catastrophic damage after severe weather.

Oliverson proposed House Bill 1576, which offers grants to homeowners who want to retrofit homes to align with modern building codes, giving them better protection against hurricanes and storms. The system would encourage homeowners – without mandating them – to improve the durability of their homes, reducing post-storm damage statewide.

The bill has not yet passed the Senate.

Proposed Option #3: Other Ideas

Lawmakers are also proposing other ideas to combat Texas’s skyrocketing insurance premiums, including:

Expanding the Texas Department of Insurance to three commissioners. There’s currently just one commissioner, Cassie Brown, who was appointed by Greg Abbott in September 2021 to oversee the $290 billion Texas insurance market. Under the proposal, at least one of the insurance commissioners would be an expert in consumer advocacy.

Increasing transparency over cancellations and denials. Some insurers deny policies or claims without transparent cause. Some Texas lawmakers have proposed a system with greater transparency, requiring insurers to disclose why they’re denying coverage to homeowners or cancelling policies.

Preventing insurers from requiring auto and home insurance bundles. Some Texas insurers force consumers to also purchase auto insurance before qualifying for homeowners insurance. One proposal seeks to end this practice with the effort of reducing costs.

Ultimately, Texas lawmakers are proposing different ways to deal with Texas’s rising insurance premiums before it turns into a full-blown insurance crisis. Stay tuned to see how these changes could impact Texas’s future insurance marketplace.